Student watchdog says institutional forecasts have failed to take account of coronavirus storm
England’s regulator has suspended an assessment of universities’ finances after it realised almost 200 institutions had not factored the coronavirus crisis into recent financial forecasts.
In its annual report and accounts, the Office for Students revealed that out of 194 universities’ financial forecasts to 2023-24 received in January and February, none had included assumptions about how the coronavirus would affect their financial positions.
In the 5 June report OfS chief executive Nicola Dandridge said there were “a range of significant risks arising from this global threat”, and that “dependency on fee income from overseas students is just one area likely to be significantly impacted” by the virus.
“We paused work on our annual financial sustainability report to allow greater understanding of what is happening with the finances of providers as a result of the pandemic,” Dandridge confirmed.
An analysis by the University and College Union and consultants London Economics found that universities were facing losses of more than £2.5 billion next year as Covid-19 affects income from tuition fees, accommodation and conferences.
A list of potential risks facing the OfS revealed the regulator’s fear that “a provider exits the market in an unplanned way”, which would have an “impact on student outcomes and experience, and builds a perception of the OfS not regulating effectively”.
Dandridge wrote that the OfS is combatting the risk through “proactive monitoring of registration conditions, effective planning for early interventions, and development of better protections for students”, but warned that universities “are operating in a volatile environment, with demographic and financial challenges”.
As of 31 March, 394 institutions had been registered with the OfS, 84 applications were ongoing and 25 had been refused registration. Dandridge reported that “unanticipated extra demands” because of “large numbers of incomplete and poor-quality applications added to an already challenging timescale” and led to many institutions’ experiencing delays.
She added that “significant resource” had been needed to deal with institutions taking “mitigating actions” after being refused registration. In March the regulator won a landmark High Court case after the Bloomsbury Institute—formerly known as the London School of Business and Management—lost its case against the OfS’s decision.
Much of the OfS’s work has been put on hold due to the coronavirus, including proposals to strengthen student protection plans and a funding competition to improve access to postgraduate courses among black, Asian and minority ethnic students. However, in March the OfS began looking at the impact of the coronavirus on teaching and learning, particularly for disadvantaged students.